To deal with the challenge of those with preexisting conditions driving up costs for everyone if insurers are required to sell them coverage, Maine implemented an invisible high-risk-pool model, which is showing great results. The model is called an “invisible” high-risk pool because customers don’t know if they are part of the pool or not. To them, it is just regular insurance.
Five percent of patients consume 50 percent of all health care resources. The state works with insurers to separate out the costs of the sickest patients, so that the premiums of everyone else are dramatically lowered. The state then subsidizes the expenses of the sickest patients. Since the adoption of this program, premiums for those in their early twenties have dropped by almost $5,000 per year, while older customers in their sixties have seen savings of more than $7,000 per year.
THE WAY FORWARD
As of the day this book is going to print, the fate of the American Health Care Act is uncertain. There have been several attempts to revive the bill with changes and amendments to make it more palatable to the conservatives and moderates in the House Republican caucus who would not support the original bill. Of course, even if the House manages to pass an improved version of the bill, the Senate then needs to pass its version, and then a final bill needs to be produced by the conference committee and then voted on by the House and Senate.
Regardless of whether the bill has passed the time you are reading this, there is still much more to be done to truly reform our health system. A dramatically better health system with better outcomes and lower costs is possible. The evidence is all around us in real practices and real systems working every day to improve lives while lowering costs.
These four strategies outlined in this chapter and the measures contained within are not an exhaustive list, but they do provide the framework for a real health care reform agenda.
President Trump and the Republicans in Congress should spend the next three and a half years holding hearings and gaining support for these reforms, passing as many of them as possible as freestanding bills.
Trump is quickly learning Washington the way he learned the hotel and real estate businesses, and his ability to get things done will be amazing. One key to his success is that Trump hires really good people and demands a lot from them. He also delegates details to competent people. But he always gives credit to those who earn it. Callista and I were at the grand opening of Trump International Hotel, and Trump made a point of getting pictures with everyone who works there. He kept telling the members of the staff that they had done a great job and were the key to the hotel’s success. His enthusiasm and his interaction with the workers says a lot about how he invests emotionally in his employees.
CHAPTER THIRTEEN
THE MAKING-GOVERNMENT-WORK BOX
President Trump has the opportunity to bring the same “ahead of schedule, under budget” doctrine he applied to his real estate projects and election campaign to the federal government. However, it will require an enormous fight with entrenched interests throughout the federal bureaucracy.
The experience of Governor Scott Walker in Wisconsin proves that reforms can be passed, but it takes enormous courage and determination.
Walker campaigned on a set of reforms from the day he announced to the day he was elected. I know because Callista and I did one of his first big fundraisers in Milwaukee, and I did one of his last campaign rallies in Waukesha. Walker was very consistent about what he would do if elected. When he was sworn in, he proposed the very reforms he had promised in the campaign. The Left was horrified. Its members had hoped to intimidate him into backing down.
Madison, Wisconsin, was filled with left-wing, union-led protests. Over 100,000 people took to the streets. The capitol was occupied by demonstrators for six months. Both the governor and his wife received death threats. His private home in Milwaukee was picketed, to the surprise of his parents who were living there at the time (he was in the governor’s mansion in Madison).
Having failed to stop the governor and the legislature (including Democratic state senators leaving the state to try to deny a quorum), the Left then forced a recall election, which Governor Walker won. It turns out that despite all the bitterness and huge crowds showing up to protest Governor Walker, the views of the radical left and apologists for the bureaucracies were a minority.
President Trump should take this lesson to heart as he approaches the issue of making government work again. Take the difficulties Governor Walker had to overcome in Madison and multiply by at least twenty or thirty to get some notion of the intensity he will face to implement real reform of the federal bureaucracy. However, this is not a fight that President Trump can avoid.
No matter how big the difficulties, it will require profound reform for President Trump to manage the government, implement his policies, and efficiently and effectively serve the American people.
GOVERNMENT PERFORMANCE: A LONG-IGNORED ISSUE
The federal government’s disastrous response to Hurricane Katrina in August 2005 was probably the moment when the federal government’s incompetence became impossible to ignore. Americans saw in painful, vivid detail just how ineffective our federal government had become at performing its basic functions. Viewing this incompetence in combination with the failure to secure the peace in Iraq, Americans began to demand change.
Inexplicably, President Bush failed to propose the type of sweeping reform agenda on the government that would have shown Americans he understood their concerns. Americans reacted to this failure by punishing the incumbent president’s party. Republicans lost the House and Senate in 2006, as well as most governorships and state legislatures in the United States.
Yet even after this stinging defeat, during which the issue of government performance was front and center, the Bush administration failed to get serious about proposing a plan for reform.
In 2008, dismayed by the president’s inaction and worried about Republican prospects due to President Bush’s continued unpopularity, I wrote a book called Real Change: From the World that Fails to the World that Works. In it, I argued that Americans were hungry for change and that dramatic measures to improve government performance were a critical part of what they wanted. I also argued that this change had to come from the Right because the Left was so captured by the government employee unions—which are a major inhibitor of reform—that they could never be anything more than enablers of the status quo.
Unfortunately, Republicans failed to make a dramatic change agenda the centerpiece of their fall campaign. As a result, Americans elected a president in 2008 whose slogan was “Change you can believe in.” Then, being a left-wing ideologue from a left-wing party that is in the thrall of government employee unions, President Obama totally failed to deliver real change to make government work again—just as I predicted. Because of this, the high-profile failures continued to mount and the frustration of Americans deepened.
Two government failures, in particular, stick out due to the amount of attention they received.
The first was the disastrous launch of Healthcare.gov, which kept crashing and even months after it stabilized still could not accurately verify people’s vital information. Obamacare was badly designed, but there was no reason within the law from a public policy perspective that the technical launch of the website was destined to be a mess. That was purely a function of the government’s ridiculous contracting rules and lack of accountability.
The second was the wait time scandal at the Department of Veterans Affairs. In 2014, we learned that dozens of VA facilities had been falsifying their records to hide outrageously long wait times for veterans to receive appointments. The VA’s inspector general reported in 2015 that 307,000 veterans may have died waiting for care. The Obama administration reacted by firing Eric Shinseki, the VA secretary, but this was a purely symbolic gesture. Nothing actually changed. Two years later, in March 2016, a fifty-one-year-old veteran actually set himself on fire in front of a VA facility in New Jersey in prot
est of the bureaucracy’s coldhearted incompetence.
This escalating series of scandals, breakdowns, and calamities is why Americans overwhelmingly view the federal government as incompetent. The 2016 Forrester Research US Customer Experience Index found that the federal government was ranked last by survey respondents out of twenty-one major industries. In fact, of the 319 brands tested, five out of eight of the worst-performing brands are run by the federal government.1 And according to Pew, just 20 percent of Americans believe that federal government programs are “well run.”2
UNACCOUNTABLE BUREAUCRATS
Right after World War II, the US government was an amazingly effective system. However, as the bureaucracy grew, it became steadily slower and less competent.
The problem is bigger than just the sheer size and complexity of the bureaucracy. The federal workforce has become a powerful interest group more interested in self-protection than in serving the American people. It has negotiated ridiculous rules on terms of employment that make it nearly impossible to fire or discipline anyone.
For example, disciplinary actions, including termination, are subject to lengthy and expensive appeals processes, during which the employee is entitled to keep receiving his or her salary.
Over the past few years, the Department of Veterans Affairs has been the most visible and scandalous example of management paralysis due to a combination of civil service and union contract rules.
Last year, the Washington Post reported:
More than 2,500 employees at the Department of Veterans Affairs were placed on paid leave for at least a month last year, and the agency acknowledges it did not track the details of why they were sent home, according to newly released information.
The total tab in salary alone for these absences—ranging from 30 days to more than a year for 46 employees—came to $23 million, according to a report provided to several congressional Republicans.3
Amazingly, even some of the people involved in the VA wait times scandal continued to collect their six figure salaries on paid leave before being fired.
Sharron Helman, the Phoenix VA Hospital director during the wait times scandal was on paid leave for seven months.4
Lance Robinson, Associate Director at the Phoenix VA hospital and Brad Curry, Chief of Health Administration Services at the Phoenix VA hospital were both put on paid leave for 19 months after the scandal broke, then got put back to work for two months before being fired in June 2016.5
Dr. Darren Deering, the Phoenix hospital’s chief of staff, was put on paid leave in May of 2014 and not fired until June 2016.6
This pattern is not limited to the troubled Phoenix facility:
Ed Russell was the director of the regional benefits office of the VA in Reno, NV. After years of poor performance, Mr. Russell was put on paid leave for several months, and then as part of a court settlement was given a new, work-from-home advisory position which never existed before.7
Terry Wolf, the Pittsburgh VA hospital director during an outbreak of Legionnaire’s disease, spent five months on paid leave.8
Frederick Harris, a nurse’s aid at the Alexandria VA Hospital, continued to be employed for four years despite being criminally charged with manslaughter after beating a patient to death in 2013. He was finally suspended indefinitely on February 14 after being indicted on a new charge of negligent homicide. His trial is scheduled for May 1.9
Even negligent doctors at the VA are protected:
David Houlihan, a doctor at the Tomah, Wisconsin, VA, was on paid leave for over a year despite having his medical license suspended for drugging veterans with massive amounts and dangerous combinations of opioid painkillers.10
Daniel Kim, an ophthalmologist at the Jackson, Mississippi, VA, was put on leave with his full salary after blinding a patient during routine cosmetic surgery. The incident mirrors another one from his career in which he forged a patient’s consent form, who then died in routine cosmetic surgery.11
Jose Bejar, a neurologist at the Topeka, Kansas, VA, received more than $330,000 while on paid leave for two years after five women accused him of sexual misconduct. He finally pleaded no contest to the charges.12
President Trump has expressed nothing short of outrage at the scandal-wracked VA, pledging to find and fire corrupt employees at the organization, empower Veterans Secretary David Shulkin to bring the sprawling bureaucracy under control and provide better care for veterans.
While the Department of Veterans Affairs is the most visible example of federal management collapse, similar examples can be found in virtually every federal department and agency.
The Department of Defense was recently exposed burying a report that outlined how to save $125 billion over five years in administrative waste. The report was hidden out of concern that Congress would use it as an excuse to cut the department’s funding.
Medicaid made $36 billion (6.25 percent of its budget) in improper payments in 2016 alone.
I was recently told (on a confidential basis) of another agency that has two federal employees who have failed to work for two years. One simply stays home. The other turns up, puts his or her head on the desk and goes to sleep. Despite daily photos of the sleeping employee, neither has been fired, since the human relations department has either slow-walked or bungled the paperwork over and over. Furthermore, it has proven impossible to fire or discipline the nonperforming personnel employees themselves either for incompetence or nonperformance.
So, the head of the agency can’t fire the sleeping or absent employees and they can’t fire the people who refuse to fire them.
No statistic better illustrates the disparity between the federal workforce and the private sector than the fact that the monthly layoff and discharge rate in the private sector is more than three times the annual firing rate in the federal government.13
Not only is it nearly impossible to fire or discipline a federal employee, it is enormously time consuming to even let an employee know that he or she is underperforming.
Federal managers are required to produce individualized performance-improvement plans for employees whom they rate as less than “fully successful” in their reviews. Furthermore, even those reviews are subject to an appeals process that can take months.
This helps explain why, per the Government Accountability Office, 99 percent of the members of the federal workforce are given scores of “fully successful” or above on their performance reviews. In fact, 74 percent are given above-average ratings.14
Another study, this one by the Office of Personnel Management, showed that even though 80 percent of all federal managers say they have managed a poorly performing employee, only 15 percent have given an employee a less than “fully successful” rating. Worse, less than 8 percent attempted to discipline the employee, and among those who attempted to do so, 78 percent said their efforts had no impact.
Imagine the effect of this management dysfunction and paralysis on the federal employees who want to do a good job.
The 2016 Federal Employees Viewpoints Survey showed that only 29 percent of employees believe that “in my work unit, steps are taken to deal with a poor performer who cannot or will not improve.”15
As the system continues to decay, if you have a system that defends incompetence with bad people, then good people will leave. The system gets sicker and sicker.
HOW TRUMP CAN TELL FEDERAL BUREAUCRATS, “YOU’RE FIRED”
President Trump can follow two paths in his approach to civil service reform.
The first, articulated by the legal scholar Philip Howard, would be to change the civil service system by executive order. Howard argues in an op-ed for the Wall Street Journal that the decades’ worth of laws and executive actions that have insulated bureaucrats from accountability are unconstitutional.
Howard says that such protections for federal employees violate the Constitution’s mandate that “the executive power shall be vested in a President.”
Invoking the ideas of James Madison, Howar
d writes:
Taking away the president’s power over executive branch employees is synonymous with removing his executive power altogether. Yet this is exactly the case today. Because of civil-service laws passed by Congress many years ago, the president has direct authority over a mere 2% of the federal workforce.
The question is whether those laws are constitutional. Does Congress have the power to tell the president that he cannot terminate inept or insubordinate employees? The answer, I believe, is self-evident. A determined president could replace the civil-service system on his own, by executive order. The move would doubtless be challenged in court, but it would likely be upheld, especially if the new framework advances legitimate goals, honors principles of neutral hiring and is designed to foster a culture of excellence.
An executive order may be tempting for its simplicity; however, the experience that President Trump had over his immigration executive order suggests that it may not be the most effective. The legal process would take a long time, and there is no guarantee of success.
The better strategy, I believe is to rally the American people to insist on dramatic, deep reform of the federal civil service. Citizen activists and interested groups can be aroused and coordinated to build powerful grassroots pressure for “an honest, effective, accountable civil service.” The reforms can either be passed in 2018 or it will become a major referendum issue in the 2018 elections and lead to the defeat of antireform, procorruption, prowaste House and Senate members.
Trump should be a champion of civil service reform in the broadest sense, but he should not allow the effort to become known as the “Trump plan.” Instead, he should work with congressional leaders to hold a series of hearings, debates, and public events highlighting the issue so that it is the American people insisting on reform, not the president. Rallying the American people should not be too difficult for President Trump, especially in this case.
Understanding Trump Page 24
